It is a shame that Australia looks like it will miss out on hosting the next international climate conference. The UAE hosted last year’s climate jamboree despite investing $150 billion to expand its gas industry. I was hoping that if we hosted the next climate conference we might get a similar boost.
Alas, Australia is not attracting any major investment in oil and gas despite a boom in global investment.
Last year, three European gas companies signed 30-year gas deals with Qatar, worth $270 billion at current prices. Such is the European desperation for fossil fuels, these deals deliver gas even beyond their net zero by 2050 target.
The Department of Energy in the United States reported last November that LNG capacity in North America is set to double by 2027.
China recently signed a new 30-year gas deal with Russia.
One of the greatest ever achievements of Australian industry was to establish us as the world’s largest LNG exporter. Over the past decade $200 billion of investment was attracted to quadruple Australia’s LNG exports from under 20 million tonnes in 2012 to over 80 million tonnes today. This included building a massive new industry in Gladstone.
Gas is now Australia’s third biggest export generating over $90 billion in export revenues.
Unfortunately, given the Australian Government’s anti-gas agenda we are no longer attracting much investment, and we will be dethroned as the world’s largest LNG exporter soon. Over the past year, Australia’s oil and gas sector has attracted just $2.7 billion of capital expenditure. When the Coalition was last in Government, capital expenditure for oil and gas peaked at $60 billion over a 12 month period.
Some will say that the world has turned against fossil fuels and so we cannot attract the same investment as 10 years ago. The massive investments that are occurring in the US and the Middle East prove that story wrong.
The International Energy Agency reported last month that by the end of the decade global LNG capacity is set to grow by almost 50 per cent.
Despite having excellent gas reserves close to major consumers in Asia, Australia has attracted almost none of this investment. This is because our government introduced draconian regulations on the gas industry last year and because we remain committed to a net zero agenda that the rest of the world is barely paying lip service to.
Just over a year ago, the Government rushed through Parliament new regulations which gave it the power to set the price of gas sold in Australia, and even to tell gas companies how much they must produce. Understandably, no investors want to take the risk of spending billions on new gas supply while the government holds such a “Sword of Damocles” over their heads.
The other problem remains the Government’s insistence on delivering net zero emissions when almost no other country in the world is doing it. Our courts have held up major gas investments in Western Australia and the Northern Territory. The Australian Government has done nothing in response because its hands are tied by its net zero obsession.
Still, it is hard to feel sympathy for the major gas companies affected. They have all decided to parrot the net zero siren song, rather than defend the merit of the long-term operation of their industry.
But most other countries are not following the pied pipers of the radical, green movement. A recent UN report concluded that fossil fuel production in 2030 will be more than double what is required to meet net zero commitments.
The longer we take to realise that net zero is dead the more it will cost us.
